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Unformatted text preview: Prof. Simon D. Woodcock BUEC 280 Lecture 6 Employment Prof. Simon D. Woodcock Last day … Characteristics and trends of the Canadian labour force It’s been growing (especially women and youth) Due to population growth and migration All of this is on the supply side of the labour market Today: employment An equilibrium outcome of the labour market So we need to talk about labour demand Prof. Simon D. Woodcock Aggregate labour demand Has been growing also How do we know? Not only has number of labour market participants grown, so has (total) number of hours worked (a better measure of quantity than number employed) Real wages have risen (price) Recall: aggregate labour demand = employment + unfilled vacancies Prof. Simon D. Woodcock The employment rate ERATE = (number employed) / (working age population) Mostly rising since 1960 Falls sharply in recessions 62.4% in 2003 What is hidden by this measure? Variation in number of hours worked Conditions of work Compensation Flexibility / scheduling Uncertainty (e.g., contract vs. permanent) Sectoral change Prof. Simon D. Woodcock Sectoral shifts BIG changes in the composition of employment in recent and not-so-recent history Turn of the century: about 50% of LF employed in agriculture. Today: about 3% Where did they go? Early on: to goods-producing industries (manufacturing, resource extraction, construction, transportation, utilities, communication) This peaked in the 1950’s (>50% of LF) More recently: shift away from agriculture & goods producing sectors to services (today: about 75% of employment) This experience has been shared by most industrialized countries Prof. Simon D. Woodcock Reasons for sectoral changes in employment Marginal product of labour (MPL) is extra output produced by the last...
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